Looking at Turnip Prices
Feb 10, 2021


Gov. Tom Wolf signed legislation that allocates $912 million in pandemic-driven aid for hospitality businesses, private schools, and people struggling to pay rent or utility bills in Pennsylvania.  As part of the law, $145 million comes from the state’s workers’ compensation fund, Wolf asked legislators to include this provision in the pandemic relief bill.  The Insurance Department’s Workers’ Compensation Security Fund is financed by premiums on workers’ compensation insurance policies to ensure claims are paid if an insurer becomes insolvent.  Lawmakers and Wolf tapped into the fund for $185 million last November to balance the state’s budget.



Lawmakers in Mississippi’s House of Representatives approved a bill that would make the state's Workers’ Compensation Commission (WCC) a special-fund agency.  House Bill 1251 would remove the requirement that the WCC be funded by the general appropriations fund and any funds received by the WCC should be deposited into the general fund.  Rather it would create a special fund administered by the WCC and any monies remaining would not be appropriated to the general fund.  The bill moved to the Senate for consideration.



The U.S. Dept. of Labor formally proposed delaying the implementation of its H-1B prevailing wage final rule.  The rule aims to update the four tiers of wages that an employer must pay to high-skilled guestworkers, which are determined by the job and region where the visa holder will be employed.  The delayed final rule raises the pay for those visa holder by about 30% at each of the four levels.  The DOL is accepting additional comments on the proposed pay changes until Feb. 15.  The delayed rule won’t go into effect until May 14, 60 days after its original effective date of March 15.  Also delayed – the independent contractor rule and paying tipped workers.



In his first comments on the Tokyo Olympics since taking office, President Joe Biden said that the decision on whether the games should go ahead this summer must be “based on science.”  The International Olympic Committee (IOC) recently stated that it is committed that the previously postponed Summer Games will proceed this year.  However, coronavirus cases have been increasing and public support has been dwindling in Japan.  The official cost of the Tokyo Olympics increased 22% because of the delay and will cost $15.4 billion to host.  We’re thinking about all the Olympic and Paralympic athletes who’ve worked so hard to compete at these games and hoping for the best.


Walking the Path


The New York Dept. of Financial Services is the first regulator in the nation to issue specific guidance for property/casualty insurers writing cyber insurance.  Superintendent Linda A. Lacewell announced a new Cyber Insurance Risk Framework, which outlines industry best practices for New York-regulated property/casualty insurers to effectively manage their cyber insurance risk.  Lacewell stated that cybersecurity is the biggest risk for government and private organizations.



While acknowledging that each insurer’s cyber insurance risk will vary on many factors, the Framework describes seven practices that authorized property/casualty insurers should use to manage their cyber insurance risk.  These factors include: establishing a formal cyber insurance risk strategy; manage and eliminate exposure to silent cyber insurance risk; evaluate systemic risk; rigorously measure insured risk; educate insureds and insurance producers; obtain cybersecurity expertise; and require notice to law enforcement.  The Framework is the most recent move by the NYDFS concerning cybersecurity.  In 2017, NYDFS put into effect the first-of-its-kind cybersecurity regulation.  In 2019, the NYDFS was also the first financial services regulator to create a Cybersecurity Division to oversee all aspects of its cybersecurity regulation and policy.  You might call the NYDFS the architect of cybersecurity policy and we’ll keep an eye on how they keep building it.  


Making Our Way Around the Country


A bill introduced in Washington State would create the framework for registering eligible captive insurers and impose a premium tax on risks based in the state.  The framework would not make Washington a captive domicile but authorizes the use of captives and allows for appropriate oversight and taxation.  The proposed bill (S.B. 5312) would require captive insurers to pay a 2% premium tax.  This would raise $29 million in back taxes and generate more than $2 million annually.  Washington Insurance Commissioner Mike Kreidler launched a study in August 2020 to determine how many organizations in the state were not paying insurance premium tax as required under state law. 



The California Supreme Court threw out a constitutional challenge to Proposition 22, a voter-approved law that allows gig companies to keep treating their workers as independent contractors instead of employees.  This ballot initiative was in response to the 2019 passage of AB 5, which reclassified gig workers as employees based on new criteria to determine independent contractors.  Also happening in California…Attorney General Xavier Becerra announced the establishment of the Worker Rights and Fair Labor Section with the California Department of Justice’s Division of Public Rights.  Initially operating as a bureau within the Civil Rights Enforcement Section, the establishment of the unit as a section expands the DOJ’s capacity to implement policy and investigate workplace issues, such as wage theft, health and safety violations, and employee misclassification. 



Congrats are in order to the Tampa Bay Buccaneers who took home the Lombardi Trophy against the Kansas City Chiefs.  (PSA – The Chicago Bears beat the Bucs in October.)  The real winners?  The 7,500 vaccinated health care workers who were invited to the big game.  Poet Amanda Gorman honoring the honorary captains.  Wayne, Garth, and Cardi B inviting folks to eat local.  Stay safe, stay well, and stay connected.


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